Treasury Prices Get a Lift

Fed Seen Boosting Long-Term Bonds; More Action to Come?

By

Min Zeng And

Matt Phillips

August 10, 2011

Treasury yields tumbled Tuesday to lows not seen since the aftermath of the Lehman Brothers crisis, as the Federal Reserve said it planned to keep its key policy rate near zero until at least the middle of 2013, a reflection of growing worries about the economy.

By making such a statement, the Fed is effectively telling investors and traders that if they want to earn any return on their money in Treasury bonds, they have to buy...